Investing

Exchange-Trade Funds

Features

An Exchange-Traded Fund (ETF) is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. Shares are traded in the secondary market like the shares of a CEF, with the investor having the ability to trade at any time during market hours, sell short, or margin shares. A unique feature to ETFs is their use of “in-kind” creation and redemption of shares. The “in-kind” creations and redemption feature keeps market prices of ETF shares close to NAV and avoids the premiums and discounts typical for CEFs. Exchange specialists are established by the fund to ensure an efficient, orderly market in the shares.

Advantages

EXCHANGE-TRADED FUND ADVANTAGES

Instant diversification

Access to markets typically difficult to access

Low cost

Tax efficient structure

Tax planning advantages

Larger ETFs have efficient option trading

BLUE BELL PRIVATE WEALTH MANAGEMENT ADVANTAGES

A core holding with instant diversification

Use of commission free Schwab ETFs

The ability to use listed options particularly covered call writing

Diversified access to emerging markets with the ability to use options

Access to commodities at a reasonable cost

Access to currencies

Inflation protection

Benefits

An Exchange-Traded Fund (ETF) is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. Shares are traded in the secondary market like the shares of a CEF, with the investor having the ability to trade at any time during market hours, sell short, or margin shares. A unique feature to ETFs is their use of “in-kind” creation and redemption of shares. The “in-kind” creations and redemption feature keeps market prices of ETF shares close to NAV and avoids the premiums and discounts typical for CEFs. Exchange specialists are established by the fund to ensure an efficient, orderly market in the shares.

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